Estate of Oppenheimer

*193 MR. JUSTICE GALEN delivered the opinion of the court. Joseph E. Oppenheimer, a resident of the city of Butte, died therein on January 31, 1924, leaving a large estate, disposition of which was by him provided in a last will and testament. The will was admitted to probate on March 1, 1924, and letters testamentary were regularly issued to the persons designated therein as executors. Subsequently the widow of the testator, Cornelia E. Oppenheimer, duly presented a claim against the estate for the sum of $150,000, being the amount agreed to be paid her under the terms of an antenuptial agreement, which claim was allowed in full by the executors on May 12, 1924, and by the judge on the day following. The antenuptial agreement is in writing, and was entered into between Joseph E. Oppenheimer, “as party of the first part,” and Cornelia E. Bingham, “as party of the second part,” in New York City, on June 30, 1921, and immediately thereafter the parties thereto were there married on the same day. By the terms of the prenuptial agreement, made the basis of the claim of Cornelia E. Oppenheimer against the estate of the deceased, it is provided: “Whereas, a marriage is intended to be had between the parties of the first and second part, and the party of the first part is seized and possessed of a large estate; *194 “And whereas, it is agreed between the parties hereto that the party of the second part is not to have any dower, thirds, or right of dower in any real property of which the party of the first part is now or may hereafter become seized, possessed, and entitled to; “And whereas, the party of the first part has agreed to make provision for the party of the second part in lieu of such dower, and in lieu of any claim that she, as the wife, or upon his death, as his widow, or as one of the heirs at law or next of kin, would be seized or possessed or entitled to; “And whereas, the party of the second part has agreed to accept the sums and payments hereinafter mentioned in full for all claims of dower, or right of dower or thirds that she, the said party of the second part is entitled to as the wife, or will become entitled to as the widow, or heir at law or next of kin of the party of the first part: “Now, therefore, in consideration of the said intended marriage and of the sum of one (|1.00) dollar to me, the said party of the second part, in hand paid, the receipt whereof is hereby acknowledged, I, Cornelia E. Bingham, the said party of the second part, hath granted, remised, conveyed, and forever quitclaimed and by these presents do grant, remise, release, and forever quitclaim unto the said Joseph E. Oppenheimer, the party of the first part, and to his heirs and assigns forever, all the dower, thirds, right and title to dower, thirds and of all other rights, title, interest, property, claim, and demand whatsoever at law or in equity of me, the said Cornelia E. Bingham, the party of the second part, of, in, and to all and every the lands, tenements, and real estate whereof the said Joseph E. Oppenheimer is now seized or possessed, or whereof he may hereafter become seized or possessed or entitled to, so that I, the said Cornelia E. Bingham, my heirs, executors, administrators, or assigns nor any other person or persons for me, them, or either of them, shall have, claim or demand any dower or thirds or any other right, title, *195 claim, or demand, of, in, or to the same or any part thereof, but thereof and therefrom shall be utterly barred and excluded forever, and I do further sell, assign, transfer, and set over unto the said Joseph E. Oppenheimer, his personal representatives and assigns any claim that I, after becoming his wife or widow, may be entitled to in the personal property which he now owns or may hereafter become possessed or entitled to, and I do hereby agree that, in consideration of the payments as hereinafter provided, I have and will hereafter make no further claim against him or against his estate, his heirs, executors, administrators, or assigns, upon his demise for any share to which I as his wife, widow, heir at law, and next of kin may be entitled in the personal property of which he may be possessed. “And the party of the first part in consideration of the above release, conveyance, and assignment, agrees for himself, his heirs, executors, administrators,- and assigns to pay to the party of the second part, or in the event that the party of the second part shall predecease the party of the first part, then to her heirs, executors, administrators, personal representatives, and assigns, the sum of one hundred and fifty thousand ($150,000) dollars, as follows, to wit: Twenty-five thousand ($25,000) dollars on or before one year after the date of his ■death; twenty-five thousand ($25,000) dollars on or before two years after the date of his death; twenty-five thousand ($25,000) dollars on or before three years after the date of his death; twenty-five thousand ($25,000) dollars on or before four years after the date of his death; fifty thousand ($50,000) dollars on or before five years after the date of his death. * * * ’ ’ And 'by the terms of the will of the testator it is provided: “Having heretofore entered into a prenuptial agreement with Cornelia E. Bingham (now my wife), which was accepted by her and the sums therein being intended and agreed to be in satisfaction and bar of her dower or other rights to which by the law of the state of Montana, or by custom or otherwise, *196 she might be entitled in or out of any property of which I was seized at the time of my marriage to her or afterwards, therefore in accordance with the terms of said agreement and in fulfillment and satisfaction thereof, I direct that my trustees shall pay to my wife, Cornelia E! Oppenheimer, the sums mentioned therein.” We have heretofore had occasion to consider the effect of the terms of this contract as respects the right of the widow to a widow’s statutory allowance for her support pending administration of the estate. (In re Oppenheimer’s Estate, 73 Mont. 560, 238 Pac. 599.) On June 23, 1925, John Gribbin, the special appraiser appointed by the court to ascertain and fix the fair market value of the property of the deceased at the time of his death and of any interests or transfers of property made by the deceased subject to an inheritance tax, made and filed a written report, by which there was allowed and deducted as a debt of the decedent the sum of $150,000 due unto Cornelia E. Oppenheimer pursuant to the terms of the antenuptial contract. The clear market value of the estate as shown by such report, was reduced by the amount of the payments required to be made under the prenuptial agreement. On July 27, 1925, the state board of equalization filed its written objections to the report of the special appraiser, in part as follows: “Objects to the report of said special appraiser in allowing as a deduction the sum of ($150,000) one hundred and fifty thousand dollars, pursuant to the prenuptial agreement made between the decedent and Cornelia E. Oppenheimer, upon the ground and for the reason that the said sum of one hundred and fifty thousand ($150,000) dollars is not a proper deduction, and upon the ground and for the reason that the same represents money distributed from the estate of the above-named decedent, and that the same, pursuant to said agreement, took effect at and after the death of the above-named decedent, *197 and represents a transfer of property subject to tbe inheritance tax under the laws of this state.” The matter was regularly brought on for hearing before the court on July 27, 1925, after the conclusion of which the objections so made were sustained, and it was ordered that the executors forthwith pay to the county treasurer of Silver Bow county the amount of tax prescribed by statute upon the amount of money so to be paid to the widow under the terms of the antenuptial agreement. On August 25, 1925, the executors of the will, together with the widow of the deceased, made and filed an application for a rehearing as to the matter of the assessment and determination of the inheritance tax due from the estate. Thereafter such application came on regularly for hearing before the court, and, after all evidence and stipulated facts were submitted, the court, on September 14, 1925, denied a rehearing. The appeal is from the order made sustaining the objections of the state board of equalization to the report of the special appraiser of the estate, and from the order denying the petition for a rehearing. The assignments of error made present but a single question determinative of the appeal, viz.: Is the amount payable to Cornelia E. Oppenheimer under the antenuptial agreement properly subject to an inheritance tax? So far as applicable to the question presented, the statute provides: “A tax shall be and is hereby imposed upon any transfer of property, real, personal or mixed, or any interest therein, or income therefrom in trust or otherwise, to any person, association or corporation * * * in the following eases: * * * (3) When the transfer is of property made by a resident or by a nonresident when such nonresident’s property is within the state or within its jurisdiction, by deed, grant, bargain, sale or gift, made in contemplation of the death of the grantor, vendor, or donor, or intended to take *198 effect in possession or enjoyment at or after such, death. * * * ” (Laws 1923, Chap. 65, sec. 1.) It is the appellants’ contention that the gift or transfer of the amount of money stipulated in the prenuptial agreement was not made by will, by virtue of the laws of succession, nor' made in contemplation of death, within the meaning of the statute, and consequently is not property subject to the tax. Many authorities are cited in support of this contention by the learned counsel for the appellants in an elaborate brief by them filed. Independent, however, of the decisions of other courts, we are called upon to interpret and declare the legislative intent expressed in our own statute. The opinions of other courts are helpful to us in giving correct meaning to the language employed; however, decisions are to be found, both in support and against the appellants’ contention under like statutory provisions. (See note to Be Minor (Cal.), 4 A. L. E. 461.) “The right of succession is not inherent, and the govern ment may or may not permit it; so that when the privilege is granted, such conditions may be imposed as may appear desirable; and a law regulating succession of estates may prescribe such terms as the legislature may deem appropriate. «= * # tíl© beneficiary of an estate has no claim by right of blood or otherwise to the estate of a decedent, except as the law gives it to him. The state has a right to take all of a decedent’s property or to impose such taxes or conditions on distributive shares as it deems proper.” (State ex rel. Rankin v. District Court, 70 Mont. 322, 225 Pac. 804.) Many states have like statutes, embodying provisions similar to those under consideration, notably Wisconsin, New York, New Jersey, Massachusetts, Maine, Illinois, North Carolina, California and Utah, and in pursuance of our task we have read many decisions from the highest courts of these states. Our statute was copied from the inheritance tax law of Wis *199 consin (Laws of Wisconsin, 1903, Chap, 44, see. 1087, Wisconsin Statutes, Supp. 1906; State ex rel. Murray v. Walker, 64 Mont. 215, 210 Pac. 90), and the Wisconsin statute was borrowed from New York (Estate of Bullen, 143 Wis. 512, 139 Am. St. Rep. 1114, 128 N. W. 109). The courts of these states, however, are not in accord in construction of its provisions. (Estate of Bullen, supra.) In accordance with the accepted canons of statutory con- struction (State ex rel. Golden Valley County v. District Court, ante, p. 122, 242 Pac. 421), it is plain that the lawmakers intended that the tax should attach to such gifts or transfers as were to become effective after the death of the donor or grantor. Stripped of all unnecessary verbiage, as applied to the facts before us, the statute clearly requires the imposition of the tax “when the transfer is of property made by a resident intended to take effect in possession or enjoyment at or after * * iS death,” and independent of the decisions of other courts in the construction of language employed in similar statutes of other states, we have heretofore held, and we think correctly, that, where the transfer of property is not to take effect in possession or enjoyment until after the death of the transferor, whether in contemplation of death or not, it is subject to the tax. (In re Estate of Schuh, 66 Mont. 50, 212 Pac. 516.) Upon reference to the antenuptial agreement, it is at once disclosed that the wife was not to be paid the amount of money agreed upon until after the death of Joseph E. Oppenheimer. The amounts so to become due are, by the contract, to be paid her within a period of five years after the death of the donor by his executors; such sums to be received and accepted in full of all claims, or dower, or right of dower, or thirds, that the widow would otherwise be entitled to receive as his widow or next of kin. Therefrom it is plain *200 that the payment was not intended to take effect in possession or enjoyment by Cornelia E. Oppenheimer until after the death of her husband. As well said by the supreme court of New York: “The law searches out the reality and is not halted or controlled by the form. * * “ The measure determining the liability or freedom from liability to the tax is the nature, the essence, the effect of the transfer.” (In re Orvis Estate, 223 N. Y. 1, 3 A. L. R. 1636, 119 N. E. 88.) In the case before us the essence and effect of the prenuptial agreement was to permit Joseph E. Oppenheimer, during his lifetime, to use all of his property and money as he saw fit as his own until his death, after which Cornelia E. Oppenheimer, as his widow, would be entitled to the payment of certain sums of money in full satisfaction of all her rights to dower or otherwise as his widow or heir. It is obvious that, had the section quoted above merely provided that personal property passing by will or the laws of succession should be subject to the tax, the intended scheme of taxation would have been a complete failure, for the reason that transfers, made only to take effect after the death of the grantor, would or could be substituted for wills and intestacy in order to escape the tax. It is likewise apparent that the very purpose of the antenuptial contract before us was to settle all property rights of the intended wife after the marriage, and upon the death of her husband, in lieu of testamentary or intestate disposition. It was never intended by the lawmakers, when enacting the inheritance statute, to permit the owner of an estate falling within its provisions to continue in possession and enjoyment of all of his property and the rents and income therefrom during his lifetime, secure in 'the knowledge that, upon advent of death, the legislative intent would be effectually circumvented by some such device as this. Clearly, a gift or a transfer for a valuable consideration must be in prmsenti in order to escape the tax. A deceased person *201 can have but one estate, and all property owned by him at the time of his death, including gifts or transfers previously made by him which are not to become effective until after his death, is taxable. The tax imposed is upon the right to transfer, not upon the estate. (State ex rel. Rankin v. District Court, supra; State ex rel. Bankers’ Trust Co. v. Walker, 70 Mont. 484, 226 Pac. 894; Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627, State v. Pabst, 139 Wis. 561, 121 N. W. 531; Estate of Week, 169 Wis. 316, 172 N. W. 732; Estate of Stephenson, 171 Wis. 452, 177 N. W. 579. See, also, note in the opinion in Re McKennan, 33 L. R. A. (n. s.) 606.) In the case of State v. Pabst, supra, the supreme court of Wisconsin said, and we think correctly: “The statute was not intended to restrict persons in their right to transfer property in all legitimate ways, but it clearly manifests a purpose to tax all transfers which are accomplished by will, the intestate laws, and those made prior to death which can be classed as similar in nature and effect, because they accomplish a transfer of property under circumstances which impress on it the characteristics of a devolution made at the time of the donor’s death.” Accordingly, in application of the explicit directions of the statute, the money to be paid as provided by the antenuptial contract is paid pursuant to a gift or transfer effective in possession or enjoyment only after the death of the grantor, and it is therefore properly subject to the tax. The district court correctly construed and applied the statute, and its orders are affirmed. 'Affirmed. Mr. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews concur.